Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The EUR/USD pair is trading at about 1.0722 and is aiming towards 1.0750 as risk appetite among investors has improved. To regain market participants’ confidence, the Fed may decide to postpone further rate increases.
ECB Lagarde affirms that the exposure of Eurozone banks to Credit Suisse was measured in millions of Euros rather than billions. The EUR/USD pair is displaying a sideways performance around 1.0720 in the early Asian session. The major currency asset is expected to extend its journey toward the critical resistance of 1.0750 ahead.
The shared currency pair’s three-day winning streak is predicted to continue as investors have doubts about the Federal Reserve’s (Fed) plan to raise interest rates on Wednesday.
The S&P 500 finished Monday’s session on a moderately upbeat note thanks to a late recovery. Investors appear to have applauded the coordinated efforts taken by numerous financial institutions to save the First Republic following the failure of Silicon Valley Bank (SVB) and Signature Bank. The rally in US stocks is indicating a respectable effort on the part of bulls to plant their feet.
Investors continue to be uncertain about the Federal Reserve’s monetary policy, therefore it is anticipated that the US Dollar Index (DXY) will close on a negative note for the third consecutive time.
The likelihood of a 25 basis point (bps) increase in interest rates, which would raise them to 4.75–5.00%, is greater than 76%. Jerome Powell, the chairman of the Fed, may decide to hold off on further rate increases in order to regain the trust of market players, nevertheless, given the measures being made by other central banks to protect the world economy from potential banking turbulence.
The interest rate guidance debates could weaken the US dollar for a longer time. According to Scotiabank economists, the US dollar may decline if the market anticipates that the Fed’s tightening cycle is about to come to an end.
Positive remarks from ECB President Christine Lagarde and other decision-makers on the Eurozone front fuelled the euro’s surge. ECB Lagaqrde stated to the Committee on Economic and Monetary Affairs of the European Parliament on Monday that the exposure of Eurozone banks to Credit Suisse was measured in millions of Euros rather than billions.
